Piper Jaffray Maintains Underweight on GameStop (GME)

Piper Jaffray is out with its report today on GameStop GME, maintaining Underweight. In a note to clients, Piper Jaffray writes, "GameStop reported January quarter financial results in-line with expectations. The company guided FY11 Net Income flat to FY10 - optimistic in our view. Management expects earnings per share will increase Y/Y as the result of stock repurchases. The company has confirmed that its store base would remain flat during 2011 - confirmation of weak category trends. On solid execution, we expect the company will grow revenue and EPS by 5% during FY11. It remains unclear if GameStop has a viable strategy to transition its business to the demand of the digital consumer - primary risk factor. Underweight $17 PT (6.1x FY11E EPS)." Shares of GME closed Thursday at $21.73.